Dividing assets in a divorce can be a challenge, one that’s only further complicated if the couple owns commercial real estate together. Should you find yourself in this position, you’ll want to take a few steps to ensure the property is appropriately managed during the divorce process. We talk a little bit about handling a commercial title during a divorce.
Commercial Property Title And Divorce
We help clients navigate title issues during a divorce depending on where they live, and we recommend looking into local state laws for property distribution, but we’re going to focus on how the issue is typically handled in Minnesota. For this blog, let’s assume that one party is going to retain control over the property in a divorce and it’s not going to be sold. If you’re retaining the property, you’ll want to work with a title service company like Commercial Partners to square up a couple of things on your end to prevent headaches down the road.
You’ll likely work to refinance any existing loan on the property. If you’re taking the property, your former spouse is not going to want to be listed on the mortgage. During the refinancing period, you will likely be required to obtain title insurance by your mortgage lender. This protects their interests in the event of an unexpected claim on your property. You can also purchase an additional policy that protects your financial interest should an unforeseen claim arise. This updated one-time title insurance policy ensures that your new mortgage and your updated ownership structure is protected going forward.
As assets change hands during a divorce, you’ll need to ensure that any outstanding liens are accounted for. If one spouse had outstanding debt or was hiding financial problems, there could be liens on the property, which will need to be settled before a mortgage is refinanced. A title company can help identify legitimate liens against a property so that they can be factored into any asset division.
Divorce can be a complex process, especially when commercial assets are involved, so let a team of professionals ensure everything is handled correctly and as needed to facilitate a smooth transition. For more information on how we can assist, or for help with a different aspect of commercial real estate, give the team at Commercial Partners a call today at (612) 337-2470.